PRIME staking rewards: Year 1 epochs/funding, & PCCP 2: repurposing retroactive rewards to reward active stakers

This discussion summarizes a proposed approach to disseminating ParagonsDAO’s Staking Rewards, as discussed and directionally agreed with the Treasury Council on January 12, 19, and 30, 2023.

As laid out in the initial staking model design from March 2022, 30% of the Initial PRIME Rewards we receive will be dedicated to funding staking rewards (this includes Prime Event rewards for EADAs/Prime Sets as well as the first year of Caching).
Our latest estimate of the Initial PRIME Rewards we’ll receive is approximately 1,185,100 PRIME (this is almost 10% higher than our previous working assumption of 1,080,000 PRIME, as a result of our continued acquisition and caching of Parallel assets).

30% of that (to be dedicated to staking rewards) is 350,130 PRIME. The intention, as laid out in the initial proposal, is to distribute Initial PRIME Rewards over a 12-month period.

Part 1 - Year 1 Prime Reward funding

Epoch Length

We recommend making Staking Reward Epochs 1 month long, in order to provide regular distributions of PRIME to the community of PDT stakers. Initially, we were under the impression that PRIME would only be distributed from Echelon on a quarterly cycle, and therefore had previously communicated our proposed staking model as such.

As that is not the case, we are not restricted by such quarterly timeframes for our own staking rewards. Monthly distributions to stakers is more attractive and allows stakers to more regularly reap the rewards of staking.

Epoch funding

We recommend smoothing the funding of our Initial Prime Rewards over 12 months, with a slight additional weighting in Epoch 1 to recognize that many stakers have been staking their $PDT without returns since late September 2022 as we’ve been waiting for PRIME to unlock. However, we propose that this weighting reflect only a small additional time period (60 days instead of 30) for these reasons:

  1. Early stakers have been building their multiplier and will get a greater percentage of rewards already
  2. New stakers could collect an outsized benefit from an Epoch 1 pool funded to recognize pre-Epoch 1 stakers

In practice, that means Epoch 1 would be funded based on a weighted of 15.38% of the total Initial PRIME Rewards pool (~54,692 PRIME), and Epochs 2-13 would be weighted at 7.69% of the pool (~27,346 PRIME).

This funding does not account for continued Prime Set caching rewards (via Echelon’s Prime Sinks), nor does it account for revenues we’ll earn in PRIME from our play-to-earn model. Therefore, we expect that once we start earning those revenues later in 2023, we can increase PRIME rewards in later reward pools during year 1 (and/or use those revenues to ensure sustainability of staking rewards into year 2/Epoch 13+).

We intend to provide a proposal around usage of PRIME Sink throughput for staking rewards before they come online. Once modelled, and we will retroactively capture any PRIME emitted through sinks as part of that proposal.

You can review funding assumptions and modelling in this document, including this scenario (referred to as Scenario 4) and 3 other scenarios the Treasury Council has discussed. We feel Scenario 4 best balances sustainability of staking rewards and an acknowledgement that many will have been staking for over 5 months without reward, while minimizing risks of users gaming the system.

Proposed Epoch funding (green)

Part 1 will be a simple Treasury Council vote following consideration of community feedback.

Part 2 - PCCP 2: Repurposing retroactive rewards to reward active stakers

The initial staking model design outlined a retroactive reward for early PDT holders, as 10% of the 30% staking rewards from Prime Event 1 (totalling 7,680 PRIME) to be distributed to over 1,200 holders at the time.

As noted in several areas of that proposal, the purpose was to reward long-term holders/supporters. However, in retrospect, a retroactive reward for those who held PDT on February 11, 2022—three weeks after token launch (January 24, 2022)—does not reward long-term holders/supporters.

As such, we’re proposing that this retroactive reward (7,680 PRIME total) remains in the staking rewards pool to reward loyal $PDT holders, particularly, those who have participated in staking, with PRIME.

  • $PDT stakers (closer to 400 holders) represent the most loyal holders who have actively participated in the actions intended to receive staking rewards.
  • Out of the $PDT holders from February 11, 2022, many have exited their $PDT positions and given up their governance power. We should not be beholden to people with no stake in our ecosystem
  • For those who have remained (and staked), this proposal is much more attractive. By including this 7,680 PRIME in the staking pool for year 1 (rather than removing it to pay retroactive rewards), this more limited group of stakers receives a larger portion of that 7,680 PRIME. This also encourages the intended action (staking) this reward was designed for in the first place.

In short, rewarding those who have not held or staked $PDT with our PRIME revenues would be a disservice to $PDT holders, and those who have staked $PDT benefit more from this proposal.

Part 2 is a ParagonsDAO Configuration Change Proposal (PCCP) as it seeks to change something that was voted in by the community in March 2022. That means that following consideration of community feedback, it will undergo both a Paragons Council and Treasury Council vote.


For Part 2, why not distribute to the overlap of holders on 2/11/22 and current stakers? That way you rewards long term holders exclusively rather than sharing it with new stakers.


Interesting idea that rewards true long-term holders from then to now. We can discuss this idea in the community meeting!


agreed with this take
think it makes sense to reward the overlap

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Revised proposal re: Part 1 - Year 1 Prime Reward funding

Year 1 Prime Funding Reward

The Treasury Council’s intention is to find a balance that accommodates early and new/future stakers, designing in line with the initial requirement to ensure we continue providing staking rewards from the Initial Prime Allocation over a 1-year period.

Sentiment during our live community discussion strongly supported this proposal and to date, there has been no resistance shared on this forum discussion.

However, some community members shared strong convictions in our Discord server’s General channel, suggesting to fund earlier staking epochs with more PRIME to provide existing stakers with greater share of the rewards earlier. A common perception from this group was that smoothing it over the year felt like a vesting/unlock on tokens they felt should be directed to existing stakers.

Based on this feedback, the Treasury Council modelled out several additional scenarios, and concluded that we would not support aggressively frontloading rewards in Year 1. However, we’ve agreed to present an alternate option that distributes significantly more PRIME earlier (Option B: Stepped Proposal) alongside Option A (the original proposal). Early next week, the Treasury Council will vote between these two options.

Review assumptions for this chart and potential APR modelling in this sheet

Option A: Initial Proposal

  • Staking rewards pool is smoothed over year 1, with 100% extra funding in Epoch 1

Option B: Stepped Proposal

  • Staking rewards pool is split into 3 tranches over Year 1, reducing every 4 months
    • 50% directed to tranche 1 (Epoch 1-4)
      • Within tranche, 60% of allocation in months 1-2, and 40% in months 3-4
      • This moves over 41,000 PRIME forward into tranche 1
    • 30% directed to tranche 2 (Epoch 5-8)
    • 20% directed to tranche 3 (Epoch 9-12)
  • Ideally, tranches 2 and 3 will be topped up by Prime Sink/gameplay revenues—but if they are delayed, rewards are still attractive using current assumptions.

Under both options:

  • The staking multiplier continues to apply, ensuring those who have staked longer receive a greater share of the rewards.
  • The council will commit, now, to funding the Year 1 Staking Rewards Pool at 350,130 PRIME. This is the current estimate for 30% of our Initial PRIME Allocation, however, that may reduce with additional community Prime Key/Prime Set caching. We will lock in this funding even if it turns out to be more that 30%.
    • However, should the Retroactive Reward (changes proposed in Part 2 of the proposal) continue, the 7,680 PRIME would be taken from this 350,130 PRIME pool and airdropped to those eligible for the reward.
  • We expect ParagonsDAO to continue earning significant PRIME income in the future through streams like Prime Sink throughput (from July onwards) and gameplay revenues (from game launch onwards). The Treasury Council will prepare plans for how these revenues will fund ongoing staking rewards, and consult the community transparently and timely before deciding, similar to how we’ve consulted you about distribution of this Initial Prime Allocation.
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